|
(Continued from page 4)
• Speaking of unintended consequences, however, remember that even though having at least one credit card or loan in your own name can help you build a strong credit history, it's important to carefully manage all credit accounts on which you're named - whether as an individual, cosigner or authorized user - to prevent damage to your credit score. • Having a poor credit score can cost a small fortune over a lifetime. You'll pay higher rates and have a harder time qualifying for mortgages, car loans and credit cards. To maintain - or improve - your credit score: • • Always pay all bills on time. • • Never exceed credit limits. • • Try to keep your credit utilization ratio (the percentage of available credit you're using) below 30 percent. • • Don't automatically close older, unused accounts; 15 percent of your score is based on credit history. • • Each time you open a new account there's a slight impact on your score, so avoid doing so in the months before a major purchase like a home or car. • Bottom line: Make sure you have credit in your own name, in case you ever need to open a new account based on your own credit history. Just make sure you don't overextend yourself or mismanage credit you currently have. • Jason Alderman directs Visa's financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney •
|
|